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Microsoft Corporation Sacrifices 18,000 in Its War With Google

Three Fools take to the Internet to discuss the implications of Mr. Softy’s massive cut, and what it means for its fight with Google.

This guy is changing everything at Microsoft, and that's probably bad news for Google. Credit: Microsoft.

Microsoft(NASDAQ:MSFT) announced plans to lay off some 18,000 workers, or 14% of staff, last week. Nokia will suffer the brunt of the cuts, but who else loses? Guest host Alison Southwick put this question to Fool analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up on Wall Street, The Motley Fool's Web show in which we talk about the big-money names behind your favorite technology, movies, toys, video games, comics, and more.

In an email memo, CEO Satya Nadella promised to start cutting immediately and expects that most of those who'll be moving on will know within six months. "My promise to you is that we will go through this process in the most thoughtful and transparent way possible," he wrote.

Nathan says the move, while painful, is a reflection of the situation in which Microsoft finds itself. Surface tablets haven't sold nearly as well as the company hoped, and Windows Phone badly lags Android and iOS. Not exactly what you want to see from a company that expects to be profiting from a "mobile-first" future. Eliminating distractions should help.

Tim agrees, noting that Nadella's boldness suggests that he understands that incremental change is no longer an option for Mr. Softy. Sweeping change has to be the norm, and it needs to come fast. Putting Office front and center -- and then building a multi-platform ecosystem to support it -- appears to be the priority. A wider war with Google(NASDAQ:GOOGL)(NASDAQ:GOOG) would almost certainly follow, Tim says.

Now it's your turn to weigh in. How do you rate Microsoft stock right now? Click the video to watch Alison put Nathan and Tim on the spot, and then leave your take in the comments box below. You can also follow us on Twitter for more segments and regular geek news updates!

Author

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment. Find him online at timbeyers.me or send email to tbeyers@foolcontractors.com. For more insights, follow Tim on Twitter.